Natural Infrastructure Investments and the Nexus: A Global Overview Genevieve Bennett, Forest Trends’ Ecosystem Marketplace March 2014
Genevieve Bennett, Forest Trends’ Ecosystem Marketplace March 2014.
Dec 15, 2015
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Natural Infrastructure Investments and the Nexus: A Global OverviewGenevieve Bennett, Forest Trends’ Ecosystem Marketplace March 2014
Who we are
The infrastructure gap
Estimated Global Annual Infrastructure Investment Needs by 2030
$ billions
Water Infrastructure
$1,000
Electricity Transmission and Distribution
$80
Roads
$160SOURCE: Source: OECD
(2006). "Infrastructure to 2030: Telecom, Land
Transport, Water and Electricity."
Managing our landscapes as natural infrastructure
which means identifying the services they provide that we depend on
like pollution filtration or flood control
and protecting those services, or compensating the people who do.
SOURCE: Charting New Waters: State of Watershed Payments 2012.
Why natural infrastructure?
2008 2009 2010 2011 2012 20130
1000
2000
3000
4000
5000
6000
7000
8000
9000
Watershed services, globalForest carbon, globalWetland and stream banking, USBiodiversity offsets/banking, global
$ m
illio
ns
Eco-markets: Global values 2008-2013$ millions
Current state of finance
205 active projects 77 in development $8.2 billion transacted in 2011 117 million ha under management that year SOURCE: Ecosystem Marketplace’s ‘State of’ reports series
Value of Watershed Investment Programs, 2011 $ millions
Investments by region
Asia: $7,460
North America: $361Oceania: $149
Europe:
$3
Africa: $109Latin America:
$89SOURCE: Charting New Waters: State of Watershed Payments 2012.
The “classic model”
SOURCE: Charting New Waters: State of Watershed Payments 2012.
Polluter Pays: <1%
Share of investments by payer typePercentage of total transaction values, globally
Beneficiary pays: 3%
SOURCE: Charting New Waters: State of Watershed Payments 2012.
China
Not ChinaPublic good payer
97%
Who’s paying?
82% Direct contracts with governments and NGOs
7% Endowment and static funds for water6% Direct contracts with water users
2% Water rights banking/acquisitions for instream flow1% Water quality offsets and trading
>1% Groundwater mitigation banking
>1% Revolving loan funds
>1% Green infrastructure tax credits/incentives
Investments in practice
SOURCE: Charting New Waters: State of Watershed Payments 2012.
What about the private sector?
SOURCE: State of Watershed Payments: Executive Summary for Business, 2013, and Gassert et al, Aqueduct Global Maps 2.0, 2013.
67% of businesses managing water risk on-site4% managing risk in the supply chain3% managing risk at the watershed level
Landscape-scale risks overlooked?
SOURCE: CDP Global Water Report 2013.
Why business is investing
Drivers of business investments in 2011# of projects reporting driver
SOURCE: State of Watershed Payments: Executive Summary for Business, 2013.
Case study: Lake Naivasha, Kenya
SOURCE: State of Watershed Payments 2012.
SedimentFertilizer
Reduced flows in dry seasonSurges in wet season
Flower-growing businesses
Hotels
New geothermal power plant
Ranchers
LAKE NAIVASHA WATER RESOURCE USERS
ASSOCIATION
Technical assistance Vouchers for
agricultural inputs (worth $17/per
household/year)
High-value crop seeds
Harvest revenues 30x higher than value of original voucher payment
Natural infrastructure and the nexus
OECD countriesNon-OECD AfricaNon-OECD AsiaNon-OECD Latin AmericaNon-agriculture
Projects funding sustainable agricultural practices
% of projects
Natural infrastructure and the nexus
OECD countriesOECD countries, proposedNon-OECD AfricaNon-OECD Africa, proposedNon-OECD AsiaNon-OECD Asia, proposedNon-OECD Latin AmericaNon-energy
Projects with funders in the energy sector
% of projects
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 20180
2
4
6
8
10
12
$bill
ions
X FACTORS:Multilateral finance for water and energy infrastructure
Post-2015 SDGs on water and the nexus Guidance and incentives for business
Natural capital accounting
How do we facilitate investment?
BAU
Models for business investment
SOURCE: State of Watershed Payments: Executive Summary for Business, 2013.
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